Federal Circuit Supports Bare-Bones Patent Complaints

The district court dismissed K-Tech’s infringement lawsuit on a FRCP R. 12(b)(6) motion for failure to state a claim upon which relief can be granted. Following the Supreme Court decisions of Twombly and Iqbal, federal courts have generally required plaintiffs to add more particularity and factual allegations into their complaint and the district court’s decision in this case follows that trend. The Federal Circuit, however, has resisted with respect to patent infringement allegations. And here, the court reverses and remands.

K-Tech’s complaint alleges that the company owns several patents and that Time-Warner is infringing particular claims of those patents by transforming the digital-broadcast-signal sub-channels into a new numbering system for cable transmission. See U.S. Patent Nos. 6,785,903 (claim 24); 7,485,533 (claim 13); 7,761,893 (claims 1 and 9); 7,984,469 (claims 1, 5, 9, 12, and 15).

Citing Twombly, the district court dismissed the complaint,

Plaintiff [complaint] seems to suggest that Defendant must operate some product or process in a manner that infringes some of the Asserted Patents, because Defendant is able to achieve the same end-result as that contemplated by the Asserted Patents. Although Plaintiff strongly believes that Defendant “must” be infringing the Asserted Patents, Plaintiff fails to explain the basis of this belief. Plaintiff does not explain why it believes that Defendant is utilizing the methods and products protected by the Asserted Patents to update the digital signals it receives rather than using other noninfringing methods and products.

On appeal, however, the Federal Circuit has reversed – holding that patent cases are special because the Federal Rules of Civil Procedure include a proposed form complaint for patent infringement (Form 18) and “proper use of a form contained in the Appendix of Forms effectively immunizes a claimant from attack regarding the sufficiency of the pleading.”

The patent infringement form (Form 18) is incredibly bare-bones and requires only the following:

Form 18

1. <Statement of Federal Jurisdiction>

2. On <Date>, United States Letters Patent No. <__________________> were issued to the plaintiff for an invention in an electric motor. The plaintiff owned the patent throughout the period of the defendant’s infringing acts and still owns the patent.

3. The defendant has infringed and is still infringing the Letters Patent by making, selling, and using electric motors that embody the patented invention, and the defendant will continue to do so unless enjoined by this court.

4. The plaintiff has complied with the statutory requirement of placing a notice of the Letters Patent on all electric motors it manufactures and sells and has given the defendant written notice of the infringement.

Therefore, the plaintiff demands:

(a) a preliminary and final injunction against the continuing infringement;

(b) an accounting for damages; and

(c) interest and costs.

According to the court when an approved form complaint is available, a plaintiff satisfies the pleading requirements of Rule 8 by either conforming to the provided form complaint or by conforming to the requirements of Twombly.

In considering whether the complaint here met the requirements of Form 18, the appellate panel concluded that there is no requirement that the complaint name the accused product or service by name. “That K-Tech cannot point to the specific device or product within TWC’s or DirecTV’s systems that translates the digital television signals each receives—especially when the operation of those systems is not ascertainable without discovery—should not bar K-Tech’s filing of a complaint.”

The touchstones of an appropriate analysis under Form 18 are notice and facial plausibility. While these requirements serve as a bar against frivolous pleading, it is not an extraordinarily high one.

This decision adds additional context to the Federal Circuit 2012 decision In re Bill of Lading, No. 2010-1493 (Fed. Cir. 2012). In that case, the court also affirmed the power of Form 18 as an approved model complaint but also indicated that the form only applies to allegations of direct infringement and not infringement by inducement.

Writing in concurrence, Judge Wallach disagreed with the majority’s conclusion that Form 18 controls over Twombly. Rather, Judge Wallach argues that the two must be reconciled:

The question presented in this case is whether KTech’s allegations are adequate under Rule 8(a). If so, they survive a Rule 12(b)(6) motion; if not, the complaints must be dismissed. The Supreme Court has interpreted Rule 8(a) to require “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). This standard “governs the pleading standard ‘in all civil actions and proceedings in the United States district courts.'” Id. (quoting Rule 1) (emphasis added). Form 18 provides a sample complaint for patent infringement, and Rule 84 “makes clear that a proper use of [Form 18] . . . effectively immunizes a claimant from attack regarding the sufficiency of the pleading.” Majority Op. at 9–10 (emphasis added). As the majority rightly points out, Rule 84 is binding on this court to the same extent as Rule 8(a). . . . Thus, this court is bound by Iqbal and Twombly … and by Rule 84. To the extent possible, these standards must be harmonized.

For his part, Wallach suggested that the complaint submitted by the plaintiff here satisfied both standards.

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One odd element of the decision is that the court indicated that the judgment on whether claims had been sufficiently pled is not a patent specific matter. The consequence of that is that Federal Circuit follows the lead of the appropriate regional circuit court of appeal. “Because it raises a purely procedural issue, an appeal from an order granting a motion to dismiss for failure to state a claim upon which relief can be granted is reviewed under the applicable law of the regional circuit.” However, following that humble claim, the court went on to repeatedly cite its own decisions and not those of the Ninth Circuit. Responding to that issue in a footnote, the court noted any difference between regional circuits on this issue would be improper because the result is dictated by Supreme Court precedent. Thus, the court’s “analysis is no different where the case comes to us from the Ninth Circuit [or the Sixth Circuit]. Form 18 is a national form, and any argument that we should interpret it differently here than we did in R+L Carriers is without merit. One trick here is that we ordinarily do not apply common law interpretation to the Federal Rules of Civil Procedure – meaning that precedential decisions of the regional circuits have less weight in this area than in other areas of law.

Sorry, trollboy. You brought up the Supreme Court’s alleged inability to promulgate bright line rules. I merely pointed out your error with an example. Do you want a tissue to dry your tears now, trollboy? Or will you reward us all with another one of your brilliant comments with even more bold, italic and capitalized text (because that makes your trollspeak so much easier to understand)?

It is a strawman, completely immaterial to the discussion at hand (civil procedures and coordinating – in a clear and brightline manner – exactly what is required. You are introducing something that no one is talking about just to knock it down.

Absolutely correct, DC. Form 18 should have been revised in tandem with Twombly; the lack of specifity that Form 18 permits for asserting a patent infringement gives almost no notice to the accused infringer as to what products/processes are infringing and what claim(s) are alleged to be infringed.

trollboy: I hereby exclude claims that can be COMPLETELY performed in the mind as no one is talking about that strawman.

Uh … trollboy, maybe you can “hereby” learn to read English and stop making a huge a—-le out of yourself. The “strawman” you are referring to is a direct response to your 2:51 comment, i.e., the bar against claiming mental processes is an example of a “brightline rule”.

In a round about way. Although it seems to me that someone might at least try their hand at an en banc hearing if not try to take it to the supremes. At the very least because even if they did use the form, just as in the case where there was “indirect” infringement and the pleading wasn’t sufficient, in this case there is supposedly “implied” infringement and they won’t even bother to say why they make the determination that infringement can reasonably be implied. On the one hand I understand the difficulty in getting information from potential infringers to be able to say they infringe without being able to perform discovery, but on the other I also understand the desire, and in fact sometimes the need, for businesses to keep their internal processes to themselves and to not be harrassed by patentees making unwarranted implications from their finished products about their internal processes.

It’s too difficult to name or describe the allegedly infringing product or service, but yet the patentee performed a proper Rule 11 analysis? If it did perform the Rule 11 analysis, I’d like to be a part of the deliberations — should we just amend the complaint or appeal? Perhaps the patentee just wanted to set some precedent.

Form 18 and Twombly cannot be reconciled. Form 18 can only be seen as an exception to Twombly, except that Twombly came after Form 18. Form 18 can be only taken as proof that Twombly was wrongly decided, since it demonstrated the level of specificity thought sufficient to satisfy the specificity requirement. Form 18 should have been revised in tandem with Twombly. Why patent plaintiffs and anti-trust plaintiffs should be treated differently?

2) tell me the controlling law as to having an eligible patent claim containing mental steps. Try not to implode in your intellectual dishonesty as I hereby exclude claims that can be COMPLETELY performed in the mind as no one is talking about that strawman.

There were some pretty ominous comments from the bench at oral argument to appellant’s counsel about how he might win this appeal, given the very liberal pleading standard, but he might face a Rule 11 problem down the road.